Every human has two minds: one like an amoeba and one like a squirrel. The amoeba mind is reactive, emotional, intuitive. It decides immediately, without planning or consideration. It is Freud’s “id”, or the System One of behavioral economics: the amoeba is your unconscious. Your squirrel mind plans, trades off immediate pleasures for future gain, is capable of abstract reasoning and cooperation – the superego.

Being an amoeba is often more fun – maybe even more authentic – but the squirrel makes things happen in the long run.

Society also has amoeba and squirrel modes. The amoeba is the local interaction: follow your senses and do what’s in your direct interest, consequences be damned. Squirrel mode requires bigger institutions, and trust: in other people’s knowledge, a shared logical picture of the world, forgoing today’s profit for society’s long-…

I recently gave a talk at TEDxCoventGardenWomen about an economic agent-based modelling system I have built (readers of Thomas Schelling may see some influence). In the talk I use this system to analyse ideas around privilege, prejudice and systemic inequality - and to test some policies that might help to solve the persistent gender and racial pay gaps that we still see in most societies.

The much-delayed final episode in a short series of posts - part 1 and part 2 here.

Lassie died one night.

As Thomas Schelling* pointed out in a thought-provoking 1982 essay, millions of people watched it happen on television one Sunday evening, and cried. Yet they all knew Lassie was not real – and that the dog who played her was probably in perfect health. Why did they experience the same emotions, the same sense of loss that they would expect to feel if their own dog had died, or even their own grandfather? Why should fictional outcomes and situations provide us with (positive or negative) utility? (And if they do, why can we not simply conjure up unlimited happiness by indulging in films or books that we enjoy and hiding from the world?)

The two hypotheses laid out in the previous posts can provide an explanation not only for this, but for a number of other psychological phenomena:

H1: That potential decision outcomes are automatically evaluated by an associative network representi…

I had this piece drafted before the murder of
Jo Cox last week. But I don’t think it changes anything I was going to say. It
simply makes it more urgent to say it. May I
introduce you to my two lovely young nieces? Natasha is four months old and
Rosalind four years. They live in rural Devon, and they’re just starting to
discover the world and decide how to feel about it. I want to think a little
about what it might feel like to be in their world. The
campaign for Britain to remain in the EU has been full of facts and utilitarian
arguments. Economic projections, dispelling of myths about regulations,
estimates of the economic and tax contributions made by European workers in
Britain. All the kinds of things that may convince you if your inclination is
to weigh up the numbers and evaluate the facts. But there
are plenty of people who don’t want to make a decision based on numbers, and I
understand that. Numbers can be manipulated. We don’t all have the time or
desire to read and check and …

Part 2 in a short series of posts. Part 1 and part 3 are also available.

One of the most powerful ideas in physics is the principle of locality. This principle insists that objects can only be influenced by other objects that touch them. Two items separated by a distance cannot directly exert any force or influence on each other, but must communicate via some medium which physically transmits the force from one to the other.

Albert Einstein described this principle as "no spooky action at a distance" and it applies to his theory of gravity as well as all the other physical forces (it gets more complicated when we consider quantum mechanics, but that would take a whole other article). The Scottish physicist James Maxwell also used it in developing his theory of electromagnetism.

Instead of the magnets directly pushing or pulling each other, each magnet creates an electromagnetic field, and sends out the field into the world around it, transmitted by light waves. When anothe…

Discussion number 1 in a series of 3: on goal-setting. Part 2 and part 3 have now been published.

Much of decision-making psychology (and by extension behavioural economics) explores the processes by which people solve a problem or achieve a goal. Usually the papers in this field contrast the rational, expected-utility way to solve these problems with the approaches people actually use in practice.

An important question they rarely address is "Why that goal?" How is it that people choose the particular problem they want to solve, the objective to work towards? In the psychology lab, the answer is easy: the person in a white coat gives it to them. In real life, that doesn't happen.

Answering this question is essential to developing a comprehensive theory to replace or challenge classical economics. Standard microeconomic theory has a clear, simple answer to this: we always have the same goal, maximising utility. Any other objective (finding the best job, working out how m…